Your Ask Joey ™ Answer

What is the difference between equity securities and debt securities?

The fundamental difference is that when you purchase an equity security, you own part of the company. When you purchase a debt security, you do not have any ownership in the company. The reason someone would buy a debt security over an equity security is that if the company were to go bankrupt, debt holders would have liquidation preference over equity holders.


Back To All Questions

You might also be interested in...

  • What are examples of debt securities?

    A debt security is any security that is representing a creditor relationship with an outside entity. Examples of debt securities include corporate bonds, redeemable preferred stock, commercial paper, convertible debt, and government securities.